A lot of new traders worry about falling for a scam. These are rare, thankfully, but they do exist. Luckily, there are things that you can do to avoid these for the most part. The combination of doing your own research and relying upon other people’s will help you to narrow down which brokers are reputable, and which are not. This might take some time to accomplish, but in the end, saving yourself from being cheated is far more important than the couple hours that you might spend looking things up for yourself.
Where to Start
The best place to start is with what has already been done. Hundreds of people or more have already researched this topic for you, and many of them have put their findings on the web. Read what they’ve written, but make sure you do it with a discerning eye. We don’t want to spend our time on implicit advertisements, but rather, factual reports of what a brokerage site is really like. Independent reviews are your best bet, and although they may be a little tough to find at first, they are out there. The truth is, the vast majority of sites are not going to scam you. But some definitely have more favorable trading conditions than others. As you read about the different sites available, you will see that while some are not directly bad, they do not really have your best interests at heart. Take this information and apply it to your decision making.
Look for Yourself
The next step is to look at the sites you have determined to be trustworthy and top notch. Now spend some time on their web pages and look around. Anyone can make a pretty looking website nowadays, but we have an internal way of telling sometimes if something feels off. If you have this feeling, don’t bother with the site. It might be nothing, or it might be something. Either way, it will create doubt in your mind, and this should be avoided. Doubts lead to mistakes in the end, and mistakes equal lost profits. So, even if it is a mental thing, it still has a real impact upon the quality of your trading. Just the idea that you are being scammed can cause you to lose money.
Always protect yourself. It is your money that we are talking about, after all. Trading is an inherently tough thing to do at times to begin with, you don’t want to make it harder on yourself by putting your cash in a place where it’s in danger.
This can be tough to overcome at first because of the fact that many sites now offer a welcome bonus. That means that on your first deposit, you are given extra cash to trade with right away. You don’t get to keep the cash right away, but if you trade enough, it’s yours. This can be misleading, and it shouldn’t have a huge impact on your decision, especially since most sites now offer this. Because really, what good does having an extra $1,000 deposited into your account do if you don’t actually get it? Look for reputable sites first, and focus on maxing out bonuses as an after thought. Never deposit more than your are comfortable and think of anything you get as a gift–something unexpected. Depositing too much into a less than reputable site is only going to allow you to lose everything–free money and your own money. In other words, the bonus can be a way to get the site into forcing you to look past their scam and pay them anyway. Again, this is rare, but it is possible.
When in Doubt
If you are ever unsure, you can always call the site’s customer service line and talk to a real person on the phone. This will give you a first person look at the site’s professionalism and let you see how they really treat their customers.